15 April 2015 - Blockbuster in RA Report
Updated 2015 price targets
15 March 2015
Following annual reports and updated company outlooks, we have updated our price targets for Galapagos, Exact Sciences, Ablynx and MDXHealth. Adjusted targets also reflect the euro-dollar exchange rate developments.
Galapagos (GLPG) price target is increased to EUR 37 reflecting completion of last patient 12–week Phase 2b Darwin 1 trials without severe safety concerns on GLPG0634 and dollar appreciation versus the euro (from 1.28 to 1.05). Phase 2b 12-week top-line results are expected in April 2015. Based on high enrollment rate in Darwin 3 long-term study, strong efficacy and safety results are foreseen, odds of Abbvie in-licensing (with $200 million payment) raised to 90%, taking odds of reaching blockbuster status in our risk adjusted net-present value model to 58%.
Exact Sciences (EXAS) price target is lowered to $ 40 as Exact's update on Cologuard sales ramp dissappointed SNJ's ambitious expectations. Long-run prospects remain excellent and cash balances are sufficient to deal with a slower sales ramp to positive cash flows.
MDXHealth (MDXH) price target is lowered to EUR 9 reflecting q-o-q decline in ConfirmMDX test number in Q4 2014 and slower than expected growth of Cologuard test numbers. While cash-burn improved significantly, risks of a further small capital increase this year have increased as sizeable Cologuard royalties will come later than projected. Dollar appreciation increases long-term value, while deteriorating short-run cash-burn. Long-term prospects remain excellent and we still expect a doubling of the share price in 2015.
Ablynx (ABLX) price target is lowered to EUR 13 following a disappointing update and in particular Merck's withdrawal from its 5 programs with Ablynx. Considering high costs of in-house developments, new partnerships should be sought. Euro-dollar exchange rate developments positively impacts pipeline value.
NEW! DO YOUR OWN BIOSTOXX VALUATION NOW
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